Yemisi Izuora
The Centre for the Promotion of Private Enterprise [CPPE], has recommended that government publish an inclusive-growth dashboard alongside quarterly Gross Domestic Product (GDP reports).
Such a dashboard should track employment, real wages, poverty-sensitive inflation, MSME performance, agricultural yields, manufacturing value added, electricity supplied to productive users, non-oil exports and private investment.
This would compel policy to focus not only on how fast the economy is growing, but also on who is benefiting from that growth, it said.
In its policy brief on Q2, GDP, Chief Executive Officer (CEO), of the Center, Dr. Muda Yusuf, applauded the acceleration of Nigeria’s real Gross Domestic Product growth to 4.43 per cent in the second quarter of 2026, from 3.89 per cent in the first quarter and 4.23% in the corresponding quarter of 2025.
The outcome, the strongest quarterly growth in five years, is an important indication that the economy is gaining momentum after a difficult period of macroeconomic adjustment.
The Center notes that the improvement was driven by stronger oil production and a fairly broad expansion across agriculture, mining, construction, trade, refining, financial services, real estate and selected service activities.
Oil-sector growth rose sharply from 2.57 per cent in the first quarter to 7.31 per cent in the second quarter, supported by an increase in average crude-oil production from 1.55 million barrels per day to 1.72 million barrels per day. The non-oil economy also strengthened from 3.94 per cent to 4.31 per cent, while services grew by 4.60 per cent and accounted for 56.62 per cent of real GDP.
The GDP report is an encouraging affirmation that the economy is gaining momentum. The priority now is to broaden these gains, strengthen employment-intensive sectors and ensure that improving output translates into better living standards.
The latest numbers suggest that greater stability in the foreign-exchange market, improved oil output, stronger investor confidence and better corporate performance are beginning to support recovery.
This is a significant positive development and reinforces the case for continuity in the broad reform direction. Abrupt policy reversals would risk renewed instability, weaken confidence and undermine fiscal and foreign-exchange gains. The next phase should therefore consolidate these achievements while easing adjustment pressures on businesses and households through lower production costs, stronger social support and employment-focused investment.
The brief noted that sectoral details of the report showed meaningful improvement in a number of activities. Mining and quarrying accelerated from 1.89% in Q1 to 6.37% in Q2, while oil and gas rose from 2.57% to 7.31%. Agriculture strengthened from 3.15% to 4.39%, with livestock growth increasing markedly from 2.20% to 6.92%. Construction improved from 6.38% to 6.75%, trade from 2.08% to 2.40%, financial and insurance services from 8.54% to 9.29%, and real estate from 2.29% to 3.76%.
Domestic refining remained a major growth pole, expanding by 43.94% after recording 37.46% in the first quarter. Cement grew by 12.75%, chemicals and pharmaceuticals by 7.70%, accommodation and food services by 6.96%, and arts and entertainment by 11.93%. Coal mining, metal ores, plastic and rubber products, other manufacturing and air transport also recovered from contraction in the first quarter.
These improvements provide a useful platform for a more diversified recovery. With the right infrastructure, investment climate and value-chain policies, the present gains could become more durable and broadly shared.
Yusuf, identified that manufacturing remained in positive territory at 3.24%, only marginally below the 3.29% recorded in the first quarter. This resilience is noteworthy given the continuing pressures from energy, finance and logistics costs. Within manufacturing, food, beverages and tobacco grew by 2.79%; electrical and electronics by 1.51%; and non-metallic products by 2.17%. Although these rates moderated, they confirm that productive activity is still expanding and could respond strongly to a reduction in structural costs.
Transport and storage maintained a relatively strong growth rate of 5.70%, although this was lower than 7.41% in the first quarter. Road transport grew by 5.82%, while rail transport and pipelines expanded by 3.74%. Information and communication technology remained one of the economy’s strongest sectors, growing by 9.62%, with telecommunications recording an impressive 10.38%. The moderation in these sectors should therefore be seen within the context of continued robust expansion.
CPPE believes the continued growth in food processing, transport and telecommunications is important because these sectors have extensive linkages with production, distribution, consumer demand and employment. The moderation nevertheless underscores the need to lower operating costs and strengthen investment. Manufacturing benefited from the strong performance of refining and cement, while other activities retained considerable scope for faster expansion as macroeconomic conditions improve.
However, he observed that electricity, gas and steam contracted by 10.63% in the second quarter after a 15.30% contraction in the first quarter. The moderation in the rate of decline is a tentative improvement, but sustained recovery in this enabling sector is essential to reinforce the broader economic momentum. Better electricity performance would lower production costs across manufacturing, agriculture, mining, ICT, logistics and services, release business capital currently committed to self-generation of electricity and significantly improve competitiveness.
Textiles, apparel and footwear contracted by 1.23%, following a 1.22% decline in the first quarter, while other services declined by 0.70%. Quarrying and other minerals recorded a sharp 39.13% contraction after strong growth in Q1, and motor-vehicle assembly declined by 1.02%. These outcomes identify areas where focused policy support could unlock substantial recovery. Textiles, in particular, has strong potential for employment and linkages with cotton farming, ginning, fashion, retail and exports, while automotive assembly can stimulate component manufacturing and technical skills.
The broader recovery would receive a major boost from a turnaround in electricity. Power-sector reform should therefore be accelerated as a central pillar of Nigeria’s industrial and investment strategy.
Growth is gaining traction; the welfare transmission should now strengthen
The CPPE sees the improving growth composition as a foundation on which a more inclusive recovery can be built. Refining, extractives, finance and telecommunications are generating substantial output, investment and confidence effects. The task is to strengthen their linkages with agriculture, agro-processing, textiles, construction, trade and small-scale manufacturing so that the expansion generates more jobs, supplier opportunities and household incomes.
At 4.43%, economic growth is moving in the right direction and now exceeds recent performance. Sustaining and raising this momentum is important given Nigeria’s poverty burden, employment challenge, population dynamics and infrastructure deficit. As food, transport, energy and financing costs moderate, households and MSMEs should experience more of the benefits of improved GDP, stronger reserves, higher public revenues and greater macroeconomic stability.
Policy success should therefore build on the positive headline GDP outcome by tracking the number and quality of jobs created, movements in real household incomes, MSME survival and expansion, agricultural yields, manufacturing value added, non-oil exports and poverty reduction. With sustained reforms and stronger productive investment, Nigeria can progressively raise growth towards 6-7%, led by sectors with strong employment and domestic value-chain multipliers.
The first priority is to consolidate macroeconomic stabilisation and translate it into productivity and lower production costs. Improved stability in the exchange rate and public finances is creating a more credible platform for investment. The next dividend should be lower inflation, declining interest rates, more reliable energy, efficient logistics and a predictable regulatory environment. Fiscal, monetary, trade and industrial policies should be aligned around competitiveness, productive investment and job creation.
Power-sector recovery would significantly reinforce the improving growth outlook. Government and regulators should accelerate investment across generation, transmission and distribution; resolve gas-supply and market-liquidity constraints; deepen metering and commercial discipline; and support embedded generation, captive power, industrial mini-grids and renewable-energy systems. State electricity-market reforms under the Electricity Act should be implemented with clear accountability and measurable targets for reliable power to industrial and agro-processing clusters.
Nigeria also needs a targeted industrial and employment strategy. Policy should concentrate on value chains with high job multipliers and strong domestic linkages, including agro-processing, textiles and garments, pharmaceuticals, automotive components, basic metals, chemicals, construction materials and light manufacturing. These sectors require lower-cost, longer-tenor finance; duty relief on machinery and critical inputs not available locally; calibrated protection where domestic capacity is viable; transparent local-content and procurement policies; and far greater predictability in tariffs, taxes and import policy.
Agriculture’s improved performance is especially encouraging because of the sector’s importance to employment, food security and rural incomes. The momentum can be strengthened through farm security, irrigation, improved seeds, fertiliser, mechanisation, extension services, storage, cold chains, insurance, credit guarantees and reliable industrial offtake. Food-import interventions should remain targeted, time-bound and predictable so that consumer relief complements, rather than weakens, domestic production and investment.
Transport’s continued 5.70% growth demonstrates resilience and provides a platform for further improvement. Reducing logistics costs would unlock even stronger performance. Major freight roads should be rehabilitated, cargo rail expanded, ports modernised and clearance times reduced. Inland dry ports, warehousing, cold-chain facilities and industrial-logistics corridors are needed to connect production clusters to domestic, regional and export markets. Customs and other regulatory processes should become more risk-based, technology-enabled and supportive of compliant businesses.
The strong performance of financial services is another positive feature of the report. The next step is to channel more of this financial-sector dynamism into manufacturing, agriculture, mining and MSMEs. As inflation moderates, there should be room for an orderly reduction in interest rates. Professionally governed development-finance institutions, transparent credit guarantees, leasing, receivables finance, export finance, corporate bonds and infrastructure instruments can help close long-term financing gaps and accelerate productive investment.
Extending the gains to households and making growth accountable
A stronger and more inclusive social-policy response would help ensure that the benefits of stabilisation and growth reach vulnerable citizens more quickly. Targeted and digitally verified cash transfers should be scaled for the poorest households, alongside nutrition support, labour-intensive public works, apprenticeships and market-relevant technical training. Temporary and transparent support for viable MSMEs would protect productive capacity, while better primary healthcare, basic education, public transport and social insurance would improve welfare and human capital.
Yusuf, pointed out that the Q2 2026 GDP report is a strong and positive signal. It confirms that economic momentum is improving, that both oil and non-oil activities are contributing to recovery, and that the economy is responding to greater macroeconomic stability. The broad spread of sectoral growth provides a credible basis for cautious optimism about the outlook.
The remaining sectoral weaknesses should be viewed as priorities for consolidating and broadening the recovery. A turnaround in electricity and textiles, renewed momentum in manufacturing, lower logistics and financing costs, and stronger consumer demand would substantially reinforce the gains already recorded. With consistent policies and focused implementation, the present recovery can become more industrial, employment-intensive and inclusive.
The economy is clearly moving in a more positive direction. The next task is to ensure that stronger GDP growth translates into expanding businesses, productive employment, rising real incomes and a steady reduction in poverty.